Correspondence among

Ed Kurtz and Kevyn Orr spoke this afternoon. Ed indicated that Flint will not accept the last offer from DWSD. His formal letter is attached. | spoke with both (separately) after the call. They both indicated that they had a good conversation, and that they sincerely look forward to working with the other in good faith over the next couple years. Kevyn indicated that he would follow up with Sue McCormack, and that his direction will be that there be no more talking to the press about the issue. Ed plans to stay silent on the deal until Monday, at which time he will address the issue in a matter of fact matter, and stay away from any divisive language regarding the issue.

If Flint is going to go into some kind of regional authority, then we need to firewall the finances of water from the general city budget. How do we keep the city from using the water system as a cash flow tool? We need to help them avoid the problem that they have been guilty of in the past of capturing water monies from customers before remittance to the Authority and using it elsewhere. | suspect that is the motivation behind their desire to split off from DWSD. If the monies go to legacy debt it will help Flint immeasurably, if general fund then they'll never get on top of the situation. Right now their legacy debt is higher than their wages for current employees and that is obviously unsustainable. | realize I'm not telling you anything you don't already know, just re-emphasizing. xxxEND_PAGE:executiveofficeemails21_b0635_1479_1479_1

> > > > Sent from my iPad > > Begin forwarded message: >

Interesting threat here. They will seek to recover sunk costs through rates in last two years. My guess is this will be a wildly huge increase. We cannot ignore the threat. We need legal advice asap. This needs immediate attention. Fred please work with the AG and Valerie.

| thought we had settled all these questions. If so, we need to answer his email with an explanation.

lthink Ed should respond to Moflorrnick. i wouldn't have reacted quite so negatively, but then that’s me. | weudd encourage him te always stress that they are open to new proposals, but haven't seen one. Bul, lm in me position to rewrite emails. i cio think that a clean closure on both sides is warranted. it’s not like KWA wouldn't still need a negotiating posture with CWSD. What was Sue‘s resporise to the request for a last best offer? | take it she wasn’t interested, or at least didn’t feel that she could offar any more than previously done? Schenk’s about as good as you can get in pubic life, so with Sue if they dan‘t have an offer, | can't figure out what we can do more, im really surprised that DW5E hasn’t responded with a final counter, Sounds like the well is pretty poisoned (no pun intended).

Just another example,